How can we set a reasonable pip?

<p id="isPasted">In trading, "setting" a pip typically refers to determining your Stop Loss or Take Profit distance based on market volatility, rather than just picking a random number. A "reasonable" pip setting is one that gives your trade room to breathe without exposing you to excessive risk.</p><p>Here is how to calculate a reasonable pip distance:</p><p><strong>1. Use the ATR (Average True Range) Method</strong></p><p>The most professional way to set a pip distance is by using the ATR indicator on TradingView.</p><ul><li>The Rule: Look at the current ATR value (e.g., 0.0012 or 12 pips).</li><li>Stop Loss: Set it at 1.5x to 2x the ATR. If the ATR is 12 pips, a reasonable Stop Loss is 18–24 pips.</li><li>Why?: This ensures your stop is outside the normal "noise" of the market.</li></ul><p><strong>2. The "Structure" Rule</strong></p><p>Instead of a fixed number, look for the most recent Support or Resistance levels.</p><ul><li>Long Trade: Place your stop 5–10 pips below the recent swing low.</li><li>Short Trade: Place your stop 5–10 pips above the recent swing high.</li><li>This uses price action rather than math to define what is "reasonable."</li></ul><p><strong>3. Calculate Pip Value for Risk Management</strong></p><p>Once you know the pip distance, you must calculate the Lot Size so you don't lose too much money. You can use a Position Size Calculator on Myfxbook to do this:</p><ul><li>Enter your account balance.</li><li>Enter your risk percentage (usually 1% to 2%).</li><li>Enter your stop loss in pips.</li><li>The tool tells you exactly what lot size to use.</li></ul><p><strong>4. Timeframe Adjustments</strong></p><p>A "reasonable" pip distance changes depending on how long you hold trades:</p><ul><li>Scalping (M1/M5): 5–15 pips.</li><li>Day Trading (M15/H1): 20–50 pips.</li><li>Swing Trading (H4/Daily): 100–200+ pips.</li></ul>